One economist says these bad numbers are going to happen again in the first quarter. However, the numbers are probably going to be a bit worse:
Economists predict that the impact of the $787bn government stimulus package will not be felt until the second half of this year and that the economy could contract by another 6 per cent in the second quarter before flattening. The US government’s 10-year budget outline unveiled last month projected that the economy would contract by 1.2 per cent in 2009 before rebounding to 3.2 per cent growth in 2010. The Congressional Budget Office, however, found those estimates to be exceedingly hopeful.(Financial Times, emphasis added). We have been into a decade of play pretend growth, or a bubble economy, some would say.
“All the incoming data suggest that the economy will contract by a staggering 7 to 8 per cent in the first quarter, before the economy begins to stabilise,” said Nariman Behravesh, chief economist at IHS Global Insight.
The cost of the Iraq and the Afghanistan wars which produces nothing but costs staggering amounts is surely to blame for much of this. We know that much of it has been waste and graft.
The new administration does not want to begin to think it is immune if it does exactly the same thing:
The United States risks repeating the same mistakes in Afghanistan that have led to billions of dollars being squandered in Iraq on its reconstruction, US auditors warned Wednesday.(Raw Story). When did economists become too lazy to look ahead so that economic catastrophe could be avoided?
The warnings come just days before President Barack Obama is due to unveil his new strategy for Afghanistan, which is expected to include an increase in reconstruction aid and civilian assistance.
Do they think acting in catastrophe movies is really where it is at, or are they mentally cruising on a virtual SS Californian watching the Titanic go down?